• Remedy for non-completion of property on time by builder

Respected Sirs
We had entered into a registered agreement with a builder on 30.9.2013 for purchase of a residential property which was structure wise complete but all other works like brick work, plaster, plumping, electricals, lift work, passage etc were pending. Prima facie it looked like the work was not more than 6 months max. Hence to be on the safe side the builder promised to give possession by 30.9.2014, i.e. one year from date of the agreement and was accordingly mentioned in the agreement to be date of possesion
The agreement value is for Rs 90 lacs and during the course of time we have already paid Rs 65 lacs to the builder but to our utter surprise the position of the building remains the same as before.
The builder had obtained the land from the land owner on condition of development as normally the builders do. Power of attorney for development of the land was given to the builder by the land owner. In early 2014 we came to know that the builder had duped the land owner of his fair share and the land owner had filed a case against him for cheque bounces and non payment of his dues. While the builder is out on bail in cheque bounce cases, property cases filed by the land owner against him is pending. The main land owner who had given the power of attorney has passed away in 2016.
Further the builder entered into an agreement with a third party for completion of the balance work and gave him a separate power of attorney on the pretext of giving a floor in the building which the builder had already sold to some one else. If you look at it there's khichdi everywhere.
Present position is we are prohibited by court to enter the property. The builder is out on bail and penny less. 
1. Is the power of attorney given by the landowner valid after his death.Can his legal heirs reverse it?
2. Is the second power of attorney given by the builder to third party valid?
3. What are our options considering we are 10 residents and there is little coordination amongst us
4. Is our case barred by limitation considering all the payment of Rs 65 lacs were completed by Dec2013
5. Which would be the appropriate court considering recent orders on real estate builders
Kindly revert. Thanks
Asked 7 years ago in Property Law
Religion: Hindu

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4 Answers

1) power of attorney coupled with consideration is irrevocable. It would be valid even after owner demise

2) second POA given by builder to third party would not valid unless there is clause in original POA authorising builder to execute further POA

3) take steps to vacate injunction order granted by court

4) your claim is not barred by limitation as builder promis d to deliver possession by September 2014

5) you can file complaint against builder before consumer forum and seek orders to direct builder to provide possession of flat . In alternative seek refund of money paid with interest , litigation costs

Ajay Sethi
Advocate, Mumbai
95221 Answers
7612 Consultations

5.0 on 5.0

1. When as far back as in early 2014 you got the knowledge of the forgery and cheating committed by the builder it was incumbent on you to issue a lawyer's notice for cancellation of agreement to sell with him and demand the refund of the amount paid to him with interest, but you did not do so.

2. The GPA executed by the land owner ceased to have any legal force on the demise of the owner, but his legal heirs can now execute a fresh GPA in favour of the builder.

3. Serve a lawyer's notice to him now to cancel the agreement to sell and demand the refund of what you have paid him, if he does not refund the amount then go to civil court through a suit for recovery of money and also file a criminal case for cheating and criminal breach of trust against him.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

property transferred on POA is invalid because it only gives right to some act on behalf of principal. when principal or author of POA dies such POA becomes infructuous, but in your case some consideration have received by the principal against POA so his legal heir cannot revoke instead of it, they are bound to execute sale deed over the property.

actually POA is executed by builder to evade tax, so builder takes POA and sells property on behalf of the owner and such tax (stamp duty) is paid by the buyer.

Shivendra Pratap Singh
Advocate, Lucknow
5127 Answers
78 Consultations

4.9 on 5.0

1. Validity of power of attorney deed would depend upon the facts of each case. But, generally speaking, a Power of Attorney becomes invalid after the death of the donor / principal. However, if it is an irrevocable Power of Attorney, for valuable consideration, creating an agency wherein the donee / agent has an interest in the subject-matter property, then such Power of Attorney may be valid even after the death of the donor / principal.

2. A power agent cannot give power of attorney to another power agent, it is invalid.

3. If the fate of all 10 members is hanging then they may all coordinate for a joint action against the builder and other issues with the landowner either out of court or through a court case.

4. No it is not barred by limitation, since you have already entered into a sale agreement by paying this amount.

5. It involves both civil and criminal laws including consumer laws, you may consult a local advocate and get his suggestions based on the facts of your case.

T Kalaiselvan
Advocate, Vellore
85422 Answers
2239 Consultations

5.0 on 5.0

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